Cabinet clears civil aviation policy; approves Rs 2,500 cap on regional fares
Mumbai: The Union Cabinet on Wednesday finally cleared the civil aviation policy aimed at introducing a range of benefits for passengers including capping of airfare to Rs 2,500 for hour-long domestic flights.
The draft of the new civil aviation policy, which was introduced for the first time by the NDA government in November 2014, was sent to the cabinet for approval on June 3, 2016.
The new policy will not only bring in new benefits to customers but will also be a boost to all domestic carriers, as the ancient 5/20 rule, which required airlines to fly for at least five years and have a feet 20 flights, have also been dealt with in a balanced way.
It will relax the 5/20 rule and new carriers can initiate international flights for the first few months, provided it has a fleet of 20 aircrafts. Although it is a great development for new players such as Vistara and AirAsia, top carriers such as Jet Airways and SpiceJet may be a tad disappointed.
In the past, the 5/20 rule was a matter of extensive debate, with established carriers demanding no changes and new players requesting immediate scrapping of the regulation. In fact, Civil Aviation Minister Ashok Gajapathi Raju had pointed out that no one has benefited from the outdated rule, hinting that the government could even scrap it completely.
While the policy was due to be finalised last year and implemented by April 1, 2016, the new policy will significantly help the domestic flying scenario in India.
By capping airfares of hour-long domestic flights at Rs 2,500, the cabinet aims to tap a large number of the country’s total populace, who were reluctant on taking costly short-duration flights. This move clearly highlighted the government’s eagerness to improve regional connectivity.
Other improvements in the new policy will make room for improved tax incentives for airlines, better maintenance and repair works of aircrafts, and a 2 per cent cess on all air tickets to enhance the regional connectivity scheme.
